All green industry business owners buy insurance - or at least they should - to protect them from liability, property damage and other disasters that could destroy a company or, at least, its bottom line. But what happens when the bottom actually falls out? Are you adequately covered?
Things looked bleak after a fire damaged Eastern Land Management's building, but fortunately most of the company's equipment escaped the flames, and ELM could continue operations.
PHOTOS COURTESY OF ELM UNLESS OTHERWISE NOTED.
Bruce T. Moore Sr., CCLP and president of Eastern Land Management (ELM), in Stamford, Conn., experienced a catastrophe to his business on July 18, 2008, at 10 p.m. when the building he leased for his landscape company caught on fire.
"The building had a box for the fire personnel containing keys to the building and emergency contact information," Moore explains. "We were contacted by the fire department. The initial thoughts were disbelief, and once on the scene, my family and I were in total distress."
Moore says that the fire was caused by spontaneous combustion due to a leak of swimming pool chemicals.
"It is extremely difficult to witness flames tearing through an office containing years of hard work and other personal photos and memorabilia. The next day (we were) more at peace when we realized the majority of our equipment was spared, and the business was able to continue, operationally, with minimal disruption," says Moore.
Moore's company was insured for the contents and loss of revenue. The fire destroyed office items, such as business records, furniture and office equipment. Additionally, ELM's trucks, which were housed in the building, were damaged due to smoke and soot. Moore's estimated loss was approximately $60,000.
"Due to an off-site backup system for our computers, we didn't lose any data and were able to continue our business operations uninterrupted for the most part," Moore explains. "My recommendation is to establish a disaster plan and also update your insurance policy to reflect additional assets purchased and the increased value of those assets."
According to its website, CAN, located in Chicago, Ill., provides insurance protection to more than a million businesses and professionals in the United States and internationally. Since 1983, it's partnered with PLANET and is the endorsed insurance carrier for PLANET members.
James Martin, construction director for CNA, says a business owner needs to be aware of the risks to his business. Typically, this assessment is done with an insurance agent, but the business owner needs to take the first step to become educated about safety and risk management. PLANET's website provides checklists and other risk management assessments for a business owner to review before talking to an agent.
Then, the insurance agent can work alongside the business owner to assess the overall risk coverage needed for an individual business. Martin also stated that business owners should make sure that they are adequately insured for legal liability since lawsuits make up the bulk of revenue loss.
CNA provides the following packages for green industry business owners:
1. General Liability Extension Endorsement
2. Installation Floater - Coverage extension for trees, shrubs and plants
3. Landscape Contractor Limited Pollution Liability - Work site coverage
4. Business Auto Plus - Extended coverage endorsement
5. Transportation of Designated Pollutants
An owner's responsibility
When it comes to safety issues, PLANET and CNA both acknowledge that today's business owner must proactively train and coach their employees on safety. Consequently, the more a business owner knows, and the more the owner communicates safety precautions to employees, the better off the owner will be in the long run in saving money on insurance premiums.
PHOTO COURTESY OF JAMES F. MARTIN.
PLANET has a Safety and Risk Management tab on its website that a businessperson can navigate to learn how to implement a workable safety program. Additionally, CNA offers risk control services, led by risk control experts, who provide industry-leading tools and support to help the business person prevent accidents and injuries while on the job. All of this information helps to save an owner's bottom line.
CNA's Risk Control Services include:
* School of Risk Control Excellence
* Return-to-Work Program
* Managing Your Fleet Safety Program
* Work Zone Safety
* Online Training Modules.
Interested landscape and lawn care owners can go to www.cna.com/risk control for more information about the above programs.
An ounce of prevention may be a pound of cure, but what about those incidents that fall under "Acts of God," such as fires, floods and storm damage? These things can't be prevented or managed; they just happen.
Martin recommends that a business owner talk directly with insurance agents to access the risk and how much coverage he'll need in case the unthinkable happens.
"For property coverage, they would need to work with their agent. They need to make sure that they have adequate insurance for the building and for the needs of rebuilding. Other coverage that an agent could address: extra expenses, business interruption and income lost during the time that the business is down. Do they want to retain that risk or do they want to insure for those risks?" Martin says.
According to Heather Finney of PLANET, the group's Disaster Recovery Plan, which is only available to PLANET members, helps companies pre-plan to lesson the impact should they suffer a disaster.
"This plan is meant to offer a look at some of the issues one should be considering and exploring within their management structure and with all employees," Finney says.
She adds that the following are high level topics that are covered in PLANET'S Disaster Recovery Plan:
* Office Evacuation and Sheltering in Place Plan
* Communication and Operational Plan for Office Disruptions
* Information Technology Disaster Plan
* Low Level Scenarios
* Limited Scope Equipment Failures
* Major Disruptions
* Planned Maintenance Schedule.
"CNA offers a whole School of Risk Control, which features webinars such as Hurricane Preparedness," adds Finney. "In addition to the above, by being a PLANET member, we have a number of PLANET consultants (who) assist PLANET members with a variety of business-related topics. We also have a Trailblazer program which is a mentoring program that allows our members to work alongside each other and learn from (one another)."
"The green industry interacts to a far greater degree with the general public than most other trades," Martin says. And this increased interaction means that the green industry business owner needs to be insured against any perceived exposures to liability.
"No two businesses face the exact same exposures, so application of the risk management best practices will differ by each business owner," he adds.
According to Martin, there are two primary exposures a business owner faces: first-party risks and third-party risks. First-party risks are the exposures of loss or damage to a business's property, while third-party risks translate into possible lawsuits resulting from a business's negligence.
Fire, water and smoke damage claimed memorabilia and photos in Moore's office. Just about everything else could be replaced because it was insured.
While a business owner can't protect the business 100 percent from accidents, natural disasters and other tragedies, the owner can still protect the firm's bottom line by researching risk management and making sure that insurance coverage is updated and covers a whole host of "what-ifs."
Moore says that if he could go back in time before the fire destroyed his original office, he would've better insured his business. "We would have insured our contents for a higher value. We did not increase the money value of our coverage to reflect the current value of the furniture and equipment," he says.
Moore was pleased by his insurance agent and carrier's response to this tragedy. According to Moore, both made sure that they had the resources available to continue the business transactions during cleanup and the move to a new building.
"One cannot dwell on the past, only to gain knowledge and make corrections for the future," Moore says. "We were fortunate to have a great insurance agent and (a) solid carrier. They went above and beyond to facilitate our needs and continue business operations. During previous insurance reviews, we chose to under-value some of the contents to save on premium cost. Not a good idea!"
A member of the Garden Writers Association, Komancheck writes about the green industry from her home near Ephrata, Pa. Contact her at email@example.com.